It wasn't long ago that we stored files on floppy disks and CDs. After that came USB flash drives and portable hard drives.

The next wave of computer storage and file backup is the cloud – and it will mean the death of physical storage, including our cherished DVD collection.

The Cloud

The cloud – or cloud computing – is really just a metaphor for the Internet and personal storage on a network. So it's not exactly new. But increased bandwidth has made cloud storage more practical for both personal and business applications.

The cloud is like a hard drive in the sky, allowing users to store files on a computer network, accessible on-demand from any device with an Internet connection.

Users can upload documents in addition to music, photos, and video as well as use the cloud as a backup service. Files can be stored on the cloud rather than saving documents on a local computer – or physical forms of storage – and thus only accessible from that device and susceptible to crashes, accidental deletion or file corruption.

An Internet connection is required to access the cloud; though files can be saved from the cloud to a local device (computer, smartphone, tablet, etc) for offline access.

Services like Dropbox, Google Drive and Carbonite Online Backup save files automatically from a local computer by syncing when files have changed. Multiple users can have access – with permission – to the same cloud drive for easy collaboration on projects.

Cloud Choices

There are public clouds – also known as shared clouds – and private clouds – also called internal clouds, which feature added security and control – as well as hybrid clouds that combine the two. However, most small businesses would be fine with public clouds like Google Drive or Dropbox.

Subscription cloud services are being offered by the Internet's biggest players including Amazon, Google and Apple. Most companies are offering a free amount of storage space to start, with premium-priced storage upgrades. Amazon and Apple cloud users can purchase music online and save it directly to the cloud or upload their own music collection. Google Drive also touts music storage with its Google Play Music Manager, a branch of the new Google Drive.

How big is the Cloud?

Want to know how big of a player it already is? How many of the digital photos you own are already stored on Facebook, Flickr or Instagram? These services are holding your photos free of charge on their servers – on their cloud. Last year, Facebook was storing a reported 140 billion user photos, at the time representing 4 percent of all photos ever taken.

Today, more than 300 million photos are uploaded to Facebook every day by its more than 900 million users.

I predict that Facebook will introduce personal cloud storage this year, a space to store files, as well as share and collaborate on projects with team members or friends. This would go head-to-head with Google's new Google Drive, which replaced Google Docs when it launched in April. A Facebook cloud would also go hand-in-hand with the rumored Facebook phone. Facebook did not respond to my request for comment on cloud storage.

How you can benefit from the cloud

You can sign up for free cloud storage today. Whether you want to save files directly to the cloud for safety or collaboration, or use it as a back-up service, you can get started in minutes.

The cloud isn't limited to just documents, photos and music. Walmart has been pushing a disc-to-digital service called UltraViolet which converts DVDs to digital copies. UltraViolet, which launched eight months ago, has attracted three million users. For an extra $2 per DVD or Blu-ray title, users can purchase a separate cloud-based digital version as well as a digital copy in Walmart's streaming-video service Vudu. The disc-to-digital conversion includes older DVDs that consumers have already purchased.

How I use the cloud: Google Drive and Dropbox allow me to work on documents from the cloud and save them directly, without downloading them to my computer. This allows me to access them at work, at home or anywhere I have an Internet connection. It also provides me with a higher level of security, in the event my laptop becomes damaged or stolen.

Since my files are on the cloud, they are everywhere I am.

The latest version of Microsoft Office is entirely cloud-based. Microsoft Office 365 combines email, calendars, documents, web conferencing and Microsoft's full line of Office products in one web-connected cloud service for easy collaboration among team members.

Cloud storage services are in a heated battle to see who can store the most user-data. Photos and music are at the forefront. Movies are next.

What's next for the cloud?

Say goodbye to DVDs. In the future we'll store our home movie collection on the cloud. Similar in effect to the way we operate our Netflix library. Buy a movie from Amazon and it's stored directly to our own personal cloud. Blu-ray discs already come with a digital copy. Soon they'll come with a cloud copy.

The cloud is the next logical step in connecting our content to our devices for business and entertainment.

The next five years will lay the foundation for cloud storage. As broadband speeds increase and high-speed Internet becomes ubiquitous, the cloud will play host to all of our digital lives and make physical storage obsolete.